The Life Cycle Continuum

by Tom Sorel

A management structure that moves a megaproject along with seamless transitions between the project's phases can affect the final outcome and success.

Megaprojects, and many transportation projects, follow a life cycle that presents special management issues. A project's life cycle normally contains five phases: (1) planning, (2) preliminary design and environmental review, (3) final design and right-of-way acquisition, (4) construction, and (5) operation. The phases are parts of a whole and are not independent, self-contained tasks that can exist in isolation. But some projects and agencies are set up in a way that encourages discontinuity or "stovepiping." Projects that are stovepiped contain phases that occur independently with little or no overlap process or hand-off between phases. Similarly, departments, managers, and employees in stovepiped organizations have a narrow and rigid set of responsibilities with no overlap.

Experience at the Federal, State, and local departments of transportation shows that stovepiping in an organization can lead to inefficiencies and consequently unnecessary delays in project delivery. Stovepiping can be a particular danger for megaprojects, with their greater complexity and longer timelines. In megaprojects, the lack of overlap and continuity between project phases can lead to the loss of accomplishments in one phase (environmental commitments, for example), cost overruns due to important components being left out of cost estimates, and records and knowledge loss as the project proceeds from phase to phase.

The Federal Highway Administration's (FHWA) Associate Administrator Cindy Burbank, head of the Office of Planning, Environment, and Realty, described stovepiping in this way when she spoke to the Center for Transportation and the Environment: "The transportation planners would develop a plan and then hand off to the environmental staff, who would do the environmental reviews and then hand off to the engineers to design the project, who would hand off to the right-of-way staff to acquire the needed right of way." Each phase was initiated with little advance coordination and little opportunity for the environmental staff to flag a potential problem to the planners and little opportunity for the right-of-way staff to warn the environmental staff or the design staff about potential problems that might occur at the right-of-way stage.

The megaproject environment exaggerates the effects of a segmented project development process. Because of their sizes, impacts, interests and involvements, and the complex financing requirements, the development processes can be quite long and the pauses between phases quite significant. Potential for inadequate phase transitions also can be significant. The sense of total project ownership might be reduced to one of project phase ownership, which could mean that early project commitments, promises, and expectations are lost through the transitions.

Colorado's T-REX project, shown here along I-25, is one of several recent megaprojects that used a well-crafted management structure to finish the job on time.

To ensure continuity and coordination, project phases should overlap, so that when work on one phase is completed, it is not simply handed off to the next phase with no transition. As FHWA stated in a report, Large Project Management and Oversight, that was submitted in 2003 to two congressional subcommittees, "It is our goal to establish project delivery mechanisms that are effective in creating the appropriate overlap for each element of project delivery, thus creating a project continuum where there are seamless transitions within the project delivery team. In this way, all members of the project delivery team are able to follow through on project commitments throughout the continuum."

Secretary of Transportation Norman Y. Mineta pledged during Celebrate Transportation in the Greater Dulles Area at the Hyatt Regency, Reston, VA, in 2001 that the U.S. Department of Transportation "will reduce or eliminate modal stovepipes whenever we can. Stovepiping and turf-guarding are out; crosscutting and collaboration are 'in.'"

Management Approaches

An appropriate management structure can help avoid stovepiping, although no one model is appropriate in every case. One approach, having a single manager, can assure that one person has overall responsibility for the entire project and can help ensure that the interests and goals of the project are kept in mind at all times. Subproject or functional-unit managers exercise control over the various phases, but the overall manager can see that the phases are coordinated and that the project stays on track and on budget.

Multidisciplinary project management teams are another possible approach to overall administration of a large project. To be effective, the teams should consist of personnel who represent the entire range of responsibilities involved with the project continuum, from planning to construction and operations.

The advantage of teams for avoiding stovepiping is that they can cut across functional boundaries in any organization, helping to manage the phases of the project delivery cycle in a seamless way and encouraging positive handoffs during the transition to different phases. In other words, project management teams can help shepherd a project through the organizational structures that are already in place while assuring that the project-level commitments made at each stage are kept.

"Manufacturing companies have learned that 'throwing the product over the transom' from design to production to marketing is bound to fail," says former Deputy Secretary of Transportation Mortimer Downey. "They have moved to the integrated product team approach, as have sophisticated government agencies like the FAA [Federal Aviation Administration] and the [United States] Coast Guard. The same should be true of the megaproject developer. The success of each phase depends on decisions made at earlier and later stages. Having [a team] working together improves effectiveness and performance for all."

For example, personnel with expertise in a successor phase should be involved in the preceding phases. Having construction personnel involved during the design phase for plan reviews, constructability reviews, value engineering studies, cost estimate reviews, and packaging of contracts can have enormous benefits from a cost and schedule standpoint, can help identify potential risks, and could potentially eliminate many problems during construction. Similarly, having design personnel involved during the environmental phase can provide valuable input into the preliminary design process.

This chart illustrates the life cycle of megaprojects, from planning to design and construction, along with the agencies that may be involved in each project phase.

Project Assessment

Whatever structure is chosen, an early project assessment is essential to identify the important activities in each phase and how they will be managed. The Louisville-Southern Indiana Ohio River Bridges project in the Louisville, KY, area is using the earned value method to establish a work schedule, notes Larry Heil, FHWA's interim project manager for the Ohio River Bridges Project and planning and program development manager for FHWA's Indiana Division. With earned value management, the completed work is compared with the budget and schedule estimates at the beginning of the project.

"[Earned value is] really the standard method used in the private sector and in many other government agencies for maintaining strong project control oversight, but it's just beginning to be used for Federal highways," Heil explains. "The method basically is a detailed work schedule that requires the project to be broken down into discrete pieces, and a critical path method [is] used to show how all the pieces depend on one another and how the time and costs are associated with each of those pieces." Any change in any aspect of the project "will be fed back into that master schedule to show how that one change affects all the other pieces," Heil says. The Ohio River Bridges project uses a custom software program to track the phases.

"The importance of setting a schedule and managing work on this project cannot be overemphasized, especially when you consider the importance of continuing to encourage public participation as construction plans are developed," says Charlie Raymer, deputy project manager for HMB Consultants for the Ohio River Bridges Project. "Public participation can, however, challenge the ability to maintain a schedule. That is especially true for this project because of the different activities that the public will have opportunities to participate in, such as selection of the bridge type and historic property mitigation processes. It is vital to successful completion of the project to have a way to measure progress toward the development of plans while also ensuring that public needs are integrated into that progress. The earned value method will provide the detail necessary to keep the project on track and allow adjustments to fine-tune individual steps without delaying work on the overall project adjustments to ensure important community and environmental values are integrated into the final construction plans."

Project efficiencies to keep the work on schedule often can be identified during the assessment. For example, Heil notes, earned value helps project managers identify "what activities you can do in parallel and which ones you need to keep extra-careful focus on because they control your critical path. If you are not managing those pieces and really keeping attention on activities that control your critical path, then obviously it quickly gets off schedule." Heil stresses, however, that the project efficiencies cannot be allowed to compromise the project's environmental process or requirements for public participation.

He says the earned value method works effectively within the context of the value engineering process that is required by FHWA on all large projects. Under this process, a multidisciplinary team whose members have a variety of backgrounds—contracting, engineering, planning, the environment—evaluates a project to identify what strategies might be implemented to save cost or time.

All design and future construction work on the Louisville-Southern Indiana Ohio River Bridges Project is planned, budgeted, and scheduled in time-phased increments utilizing a work breakdown structure to define tasks and to assign costs to these tasks. As work is accomplished, value is "earned" on the same basis it was planned. Comparison of this earned value with the planned value for a specific time period provides an indication of task progress. If more value is planned than is earned for a specified period, the project is in danger of not meeting its schedule, unless action is taken to recapture the unaccomplished work. Similarly, comparison of the earned value for a task or group of tasks with the actual costs required to accomplish such task(s) provides an indication of task cost performance. If actual costs are greater than planned costs for the accomplished task(s), then the project is experiencing a cost overrun situation. This incremental method for comparing planned, earned, and actual value for a work task provides an early indication of the megaproject's cost and schedule performance and can provide early insight into problem areas that might not otherwise be detected until later in the program.

Fast-Tracking the Project Cycle

In the course of assessing a megaproject and its phases, one management decision is whether to employ "fast-tracking," which is usually defined as compressing a project's schedule by overlapping activities that would normally be done in sequence. Early completion of a project can provide numerous cost and other benefits, but fast-tracking itself can have costs, such as those resulting from change orders associated with completing design after construction contracts have been awarded. The key is careful analysis, as well as managing the expectations of the public and other stakeholders. (See "Great Expectations".)

For Boston's CA/T Project, fast-tracking proved to be beneficial, says Carl Gottschall, project administrator for CA/T at the FHWA Massachusetts Division Office. "Some people who are critical of the project would probably say fast-tracking is not worth it. They would point to the inefficiencies, where certain things weren't known, but they moved ahead and had to make adjustments later on when that information became available. The people who think fast-tracking was worthwhile will point to the fact that the project was done faster than it could possibly have been done if you had not fast-tracked."

Vehicles rush along the new I-90 underground tunnel in Boston, MA. Contingencies for construction, design, management, and other areas help ensure that enough funds are available to cover inevitable cost adjustments in the project.

Fast-tracking allowed for the early opening of the I-90 segment of the artery to Logan Airport. Gottschall notes, "That probably cut anywhere from 15 minutes to a half hour off the trip of every car that goes through there," he says. "If you start adding up what it's worth to the 38,000 cars a day—the cost of the fuel and the labor they're saving—that's a tremendous amount of money." In fact, the management consultant for the CA/T Project estimates that fast-tracking saved 3 years of time and $1.7 billion in project costs, plus an additional $1 billion in user benefits.

Michael Lewis, director of the design unit for the CA/T project, adds, "From where I sit, I do not believe that it is hyperbole to say that without fast-tracking, a project of the size, complexity, impact, and duration of the Big Dig could not have begun, let alone be nearing completion."

Sharing Discoveries

In FHWA's initiative to improve the management and oversight of large projects, the agency is seeking ways to better integrate project delivery phases. In testimony before the Subcommittee on Transportation, Treasury and Independent Agencies of the House Appropriations Committee, FHWA Administrator Mary E. Peters said, "We are striving for a process under which planning, environmental review and analysis, engineering design, and final construction will be managed seamlessly, rather than as a series of phased, segmented pieces."

Part of that effort, Peters emphasized, involves sharing experience so that management teams may learn from others who have undertaken significant projects. "Without the benefit of experience, the management team will be doomed to a practice of discover and then respond, or reactive management," she said. "Proactive management is possible, and will be much more effective, through the sharing of 'discoveries' made on other projects. Proper FHWA stewardship requires that we facilitate effective sharing of experiences so that management teams learn from others who have previously undertaken significant projects."

An example of this sharing process was the Project Management National Study Results Conference in April 2004, sponsored by FHWA and the Florida Department of Transportation. The conference was the culmination of efforts initiated by the Florida agency to identify best practices in project management from across the Nation. Ken Leuderalbert, manager of project management, research, and development for the Florida DOT, says that because of a pending reorganization of the State DOT's project management office, "I needed to get a better handle on how States were handling their project management offices." He soon realized that Florida DOT's efforts to get a "sense of the state of the Nation in project management" would be useful to the entire transportation community.

Leuderalbert says the first step was to send out a simple survey "to get a sense of what others were doing." Responses were received from 49 of the 50 States, as well as several private companies. "We took all of that information and put it into a blind matrix so you couldn't tell which organization or State submitted the response. We wanted to pick the organizations based on their merits, not on which States they were in," Leuderalbert says.

A team consisting of experts from the Florida DOT and FHWA, including some members with megaproject experience, then identified the organizations that the team believed had the greatest potential to provide best practices in project management and sent those organizations a much more detailed survey. "We then took the survey results and identified six organizations for site visits," Leuderalbert says. "We developed a very detailed agenda based on their surveys, focusing on their best practices and how they actually conduct project management how they're organized and what tools they're using to manage projects."

The site visits, Leuderalbert says, helped pin down the practices that would be presented to the conference. For example, one State uses a predetermined scheduling template, which includes all the steps in a project from the initial environmental documents all the way to construction documents. "The system enabled the State to cut time out of the overall construction cycle," Leuderalbert notes. "Another State has a Web-based project management system," he says, "sort of a one-stop shop where you can find project schedules, project costs, documents, video logs everything on that project. For more information on the Web-based tool, contact Samuel W. Hayes, P.E., at 804-786-2545, or samuel.hayes@virginiadot.org.

Putting It All Together

Sharing experience and expertise through the Florida conference is just one of the ways that FHWA is fulfilling its commitment to promote proactive management of highway projects and address special challenges such as integration of the life cycle of megaprojects. Other examples include the development of project management workshops and training. Recent guidance and a template on management plans for major projects (posted on FHWA's Web site) will be incorporated into these educational efforts. Cost-estimating guidance has been completed, and an associated workshop is in the works for the major project continuum.

The design-build contractor for the T-REX project was required to submit a baseline project schedule and a list of milestones with its proposal. These two items became contractual requirements once the project was awarded. One way the contractor keeps on schedule is by working at night, as shown here.

Ending stovepiping and finding better ways to manage the life cycles of major projects are significant parts of FHWA's efforts to work with its State partners to encourage innovation and efficiency in program oversight and project management. It will also add to public trust. As Administrator Peters indicated to Congress, "It is clear that to be effective stewards, we must ensure that all phases of project development and delivery are effectively integrated and managed."

Tom Sorel is stewardship/oversight group leader in the FHWA headquarters Office of Infrastructure in Washington, DC, a position that carries the responsibility of leading the agency's Major Projects Team. He is a 25-year employee of FHWA who has served in a number of positions throughout the country. Prior to coming to headquarters, he served as the USDOT Olympic liaison in Salt Lake City and led the development of the multimodal infrastructure for USDOT in preparing for the 2002 Winter Olympic Games. In addition, he has served as director of planning and program development in FHWA's regional office in Albany, NY. He has received numerous awards, including the Secretary's Gold Medal Award for Collaborative Leadership and the Secretary's Planning for Excellence Award.